Sri Lanka is facing a severe economic crisis.

(Associated Press)

[Financial Channel/Comprehensive Report] 182 economists broke the news that after Sri Lanka defaulted on its debt, many international hedge funds and investors took a tough attitude during the debt negotiation process and were unwilling to reduce the debt.

These economists issued a statement on the 8th accusing investment institutions that lent money to corrupt politicians at high interest rates, they should cancel Sri Lanka's debts and bear the consequences of debt default in order to help Sri Lanka through the economic crisis.

The British institution "Debt Justice" (Debt Justice) published on its official website PO on the 8th, a statement by 182 economists on the solution to Sri Lanka's debt crisis. These economists said that private creditors hold nearly 40% of Sri Lanka's external debt, and most It is international sovereign bonds, and as interest rates go up, it means that they get more than 50% interest on foreign debt.

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The creditors charged a premium to cover their risk, reaping huge profits and leading to Sri Lanka's first default in April 2022, economists allege.

Creditors, who get better returns because of the risk premium, must bear the consequences of lending money to corrupt politicians at high interest rates.

Economists have called for Sri Lanka's debt relief talks to be at a critical stage, with much of the focus on China's attitude that all creditors should share the burden, with additional financing guaranteed in the short term.

Some economists also broke the news to the Guardian that in Sri Lanka's debt restructuring negotiations, creditors such as international investment companies and hedge funds are blocking the deal.

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